As one of China’s largest state-owned lenders, China Construction Bank (CCB) is vigorously aligning its programmes and strategies with the 14th Five-Year Plan (2021-2025), the comprehensive framework guiding the country’s social and economic development. The bank is deepening the implementation of its "three major strategies" – house rental, inclusive finance, and financial technology (fintech).
CCB is actively promoting the high-quality development of the real economy as it expands credit for inclusive financing, advanced manufacturing, strategic emerging industry, green finance and other sectors.
In the first six months of 2021, net interest income grew 5.18% while net commission income rose 6.82% from a year ago. Net profit rose 10.92% to 154.106 billion (US$23.83 billion).
It reported an annualized mean return on equity (ROE) of 1.06%, an annualized weighted average ROE of 13.10%, and a capital adequacy ratio of 16.58%. Non-performing loan rate was 1.53%, down by 0.03 percentage points compared with that at the end of 2020. The provision coverage ratio was 222.39%.
House lease strategy
For the first half of 2021, the bank reported stable progress in its house lease strategy. Covering 96% of cities at the prefecture level or above, its transparent transaction platforms serviced 14,000 enterprises as well as 37 million leasers and tenants.
The lender also completed verification of over 10 million real estate properties and registered over six million contracts as an effective tool for the government to supervise the market. It took the lead in founding an industry alliance of house leases, covering over 130 upstream and downstream enterprises in such areas as decoration design, furniture, home electric appliance and services, to promote the standardization and strengthen the development of the industry.
It continued to launch pilot services for equity transaction of house lease enterprises; made innovations in policy, standard, ownership nature, trading structure, etc.; diversified the financing channels of house lease enterprises; developed the CCB Jiangongjiayuan community for long-term leases that integrated intelligent community, public service, financial service and venturing service; and offered a comfortable living environment for blue-collar and white-collar workers, young innovators, etc.
Inclusive financing strategy
The bank has continued to promote online businesses and enhance platform operations such as CCB Huidongni, a terminal that enables enterprises to secure quick loans and one-stop financial services. As of June 2021, the platform was accessed by over 130 million individuals who carried out over 17 million downloads, as well as by more than 5.56 million enterprises and one million credited clients, resulting in the approval of loans amounting to over 700 billion yuan.
The bank has more than 14,000 outlets with 18,000-plus service officers to extend the reach of its financial services. It has continued to enhance its products and services aimed at promoting financial inclusion, such as rapid loans for small and micro businesses.
Under its inclusive financing system, the bank released loans amounting to over 4.7 trillion yuan to over 2.1 million leasers as of June 2021. Clients rose by 106,300 to 1.8 million over the period.
Under its fintech strategy, CCB has developed 180 models in five major sectors – computer vision, intelligent voice, natural language processing, knowledge graph, and intelligent decision-making – and launched them in 507 scenarios. It has established a blockchain service platform across 12 business sectors, including trade financing, cross-border payment, intelligent government and house lease.
CCB Cloud is committed to establishing a safe and reliable multiregional and multifunctional network for clients. Its cloud services support 401 projects in nine major sectors, including governmental, housing and interbank sectors.
CCB FinTech attracted three strategic investors, which led to an increase in its statutory capital and its valuation reaching 10 billion yuan. As of June, it has a 14,012-strong staff or 3.79% of the group’s total workforce. It has acquired 606 patents, including 389 invention patents, making it a leader in the field in the domestic banking industry.
Support for real economy
The bank is aggressively supporting the real economy, reinforcing key sectors while addressing weaknesses in economic development. The balance of loans has increased by 1.32 trillion yuan since the beginning of year. Incremental institutional loans to the Beijing-Tianjin-Hebei, Yangtze River Delta and Guangdong-Hong Kong-Macao regions accounted for over half of the total. The balance of infrastructure loans rose by 11.48% to 4.83 trillion yuan during the period.
The ratio of loans to medium- and long-term manufacturing projects, emerging strategic industries and private enterprises has continued to rise. Credit resources were provided through multiple channels – bond investments increased by 281.3 billion, while investment banking services provided direct financing of over 400 billion yuan to enterprises.
The bank strengthened support to foreign trade clients and established a new development pattern where domestic and international cycles promoted each other. It also introduced the concept of "financing + intelligencing" to provide all-around financial support and convenience to the Belt & Road Initiative.
CCB also helped promote the internationalization of the renminbi and aggressively developed cross-border RMB services. In the first half of the year, the bank completed cross-border settlement transactions worth 1.28 trillion yuan, wherein the RMB clearing bank of Britain had a cumulative settlement of 57 trillion yuan and thus maintained its status as the largest RMB clearing bank outside Asia.
Strengthening ESG management
CCB has always adhered to the in-depth merger of the party's leadership and company management, while integrating environmental, social and governance (ESG) concepts into its operational and management procedures. It has sought to optimize its ESG management and guide its clients to strengthen ESG management. It closely follows domestic and international regulatory requirements, and integrates environment, climate and other risks into its comprehensive risk management system.
Promoting carbon neutrality goal
CCB fully supports the country’s goal of achieving peak carbon emissions by 2030 and carbon neutrality by 2060. It established a work leadership panel to formulate and coordinate an action plan to help achieve the “double carbon” goals. It also formed an ESG promotion committee to carry out ESG-related work, and added an index of "service to ecological civilization strategy" to its performance evaluation to increase the scope of evaluation and the weight of green finance.
The bank actively developed new products, services and measures of green finance, and applied green credit, green bond, green lease, green trust and other financial instruments to support and nurture the green industry. At the end of June, the balance of green loans reached 1.57 trillion yuan, up 16.65% from the end of 2020. The ratio of loans to industries with a high energy consumption and high emissions has been declining over the years.